This paper explores both the role that local content measures can play in advancing sustainable development, and the impact that trade and investment treaties concluded over the past 20 years have had and will continue to have on the ability of governments to employ those tools. Certain local content measures had been restricted under the WTO due to wide agreement by negotiating parties that their costs outweigh their benefits. But the WTO also left a number of local content measures in governments’ policy toolboxes. As is discussed in this paper, however, that is changing, with the range of permissible actions for many countries being significantly smaller than it was even a decade ago. This narrowed policy space, in turn, can limit the steps governments can take to make progress on the universally adopted Sustainable Development Goals.
There has been a strong tendency in resource rich countries to push for more stringent local content regulations. Yet the mining industry is looking to move towards increased automation, thereby reducing the potential for local employment and procurement opportunities. This study surveys technologies that are currently being piloted at mine sites around the world and estimates potential impacts of such technologies being rolled out by using employment, procurement and other relevant data from two global mining firms. The report concludes by highlighting the potential impact of this development on the shared-value paradigm – and, by extension, the mining companies’ social license to operate – and explores ways in which governments and firms might address the predicted results.